Two decades after assuming Brazil’s presidency the first time, Luiz Inácio Lula da Silva is once again preparing to take the reins of power in Latin America’s biggest economy. After eking out a narrow win in a bitterly fought race against incumbent Jair Bolsonaro, the 77-year-old leftist leader now faces the immense challenge of paying for his ambitious pledges and keeping the politically divided country growing in the face of increased global economic and financial headwinds.
Lula is returning at a moment of acute political and social tensions in Brazil, where poverty is increasing and the economy hasn’t fully recovered from the damage wrought by the Covid-19 pandemic. Revisiting themes from his first stint—he was in office from 2003 to 2010 and subsequently imprisoned after a now-quashed corruption conviction—Lula has vowed to extend beyond the end of this year an augmented program of monthly cash transfers to the poor, exempt more people from income taxes and boost the minimum wage by more than the rate of inflation. Although these measures will help some, there’s also a risk they stoke price pressures—a global problem that officials are battling hard to contain.
